The residents of a Sydney suburb could be forgiven for thinking their neighbourhood has well and truly gone to pot. Eight houses have been raided in the past week by Australian drug squad officers after a sophisticated cannabis growing operation was discovered in the midst of a "quiet and peaceful" housing estate.

Amazed residents said they had noticed strange odours and other strange activity at the properties but had no idea anything criminal was going on.

The raids in Blair Athol began early in the week when police, acting on information, broke down the doors of one property in the housing estate in the south-west of the city. They found substantial numbers of marijuana plants as well as an indoor cultivation system including large bulbs and light reflectors.

Then police in bulletproof vests used a battering ram to raid another house - and another and another. Police said many of the two-storey brick properties had been extensively altered to accommodate the crops and included false walls, new doors and sunken floors.

Seven raids were carried out in Blair Athol and another in nearby Bradbury. The commander of the local police force, Superintendent Stuart Smith, said: "In 15 years of law enforcement I've never seen a more elaborate, more extensive ... activity conducted within residential properties.

"The internals of the houses have been changed to increase the potential to grow a larger crop inside. There's hallways and modified walls with secret passages."

The police chief said more than 2,000 cannabis plants had been confiscated so far, with the value of the crop estimated to be AU$10m (£4m).

As the raids gathered pace, residents of the suburb said they had registered strange goings-on.

They said many of the houses had a general air of neglect, the curtains and blinds were permanently drawn, and some windows had bars on them. People were seen scurrying back and forth but never stopped to introduce themselves or to talk. There was also noise and light at the houses at night, neighbours said.

Yesterday police continued to remove electrical equipment and large light shades from one house and place cannabis plants in pots, ranging in maturity from small seedlings about six centimetres high to larger plants about half a metre tall, on front lawns for collection.

A neighbour said he had noticed a strange smell coming from one of the houses, but had no suspicion anything untoward was going on. "It was like manure," he said.

Another resident was concerned that the raids might push house prices down. "We only moved here two weeks ago," said Willie Tan. "The reason we moved is that it's a safe, quiet place to raise a family."

Smith told reporters it was unlikely residents knew drugs were being grown in their neighbourhood.

He said: "The issue for south-western areas is that there is significant stress with mortgages ... these premises were able to be acquired and obviously this activity has occurred out here."

Six people have been arrested, four others are being questioned and a child has been put into care.